We may have found what is (and isn’t) sexy to keep founder of TechCrunch, Michael Arrington, awake when enterprise software is mentioned at the next Disrupt. For starters, Yammer – the social network for enterprise employees – produced $6.43-12.86 in revenue per user in 2012, while sexy consumer-facing Facebook generated $4.34. If money alone is not sexy, Greylock Partners shared 10 other reasons.
Not sold yet? We dug deeper at Disrupt SF 2013. We caught up with Yammer Director of Product Management, Drew Dillon, and Business Development Manager, Greg Love, next to the Battlefield Alley. We also visited with other software giants that showcased at the startup conference: SAP and PayPal. Before we look at how they are bringin’ sexy back, let’s first define “sexy.”
How does technology “seduce?”
There is a general consensus on what “seduces”: Companies that are cooler, leaner, and faster. They also often make better and/or cheaper products.
1. Cooler: Cool is a term frequently touted by consumer-facing technologies. “If you can disrupt an industry by making the product better, cheaper and more fun [in other words, cool], the incumbents can’t compete with you,” Sam Yagan, founder of OkCupid once said. Yelp users have corroborated with this sentiment. Based on historical reviews from Yelp Arizona, the cooler and funnier the review, the more it is perceived as useful. This emotional sell is not just appealing to consumers, but even enterprises like Yahoo. For example, coolness accounted for 75% of Tumblr’s acquisition valuation.
2. Leaner: The widely adopted “lean startup” methodology by entrepreneurs has been rearing its head among industry heavy-weights as a logical integration. SAP showed up at Disrupt this year to reinforce its developer community by launching a Startup Focus Program to experiment with agile iterative designs the “lean” way. Nike, Google, and tech/related giants have discovery and venture funds for similar purposes. These enterprise programs increase the likelihood of finding successful minimum viable products and reduce the reputational and monetary costs from failure.
3. Faster: Think big and execute fast! Time to ship improves the likelihood of being the disruptor, the one that makes you think differently and better. And speed to mass-market builds credibility and customer stickiness. Consider Box, Uber, and Square, each of which were swift executors that changed how we think about file sharing, cab hailing, and payments.
These pathos, logos, and ethos appeals make businesses and consumers feel smart. And smart, as we know it from Jobs, is the new sexy.
What is (and isn’t) sexy about Yammer?
Yammer is bringing the sexiness of consumer-facing, productivity technologies to employees. For example, its new App Directory (recently ramped up traffic generation engine) is making employee social networking more fun by integrating Yammer activities with that of other apps, much like how Facebook embeds feeds with follow and like buttons in Spotify. Here is what we uncovered from Drew Dillon and Greg Love about this strategic initiatives and its agility and speed to create more blue skies.
Cool: Although app integration is not a disruptive concept, enterprise software integration across platforms is a growing need that is hard to execute. Yammer is one of the first to do this on a private connectivity tool. Trying new apps is made easy with single-sign-on, which is akin to using Facebook ID to log into Spotify. Partners are trendy apps, such as GitHub, Klout, and HootSuite. Partner software are either complementary productivity apps or ones for which Yammer cannot build the best of breed, making Yammer an ideal cross-promoter. Yammer’s idea is far more original than “innovations” by other giant enterprises, such as PayPal’s perfect replication of startup app, OrderAhead, that allows you to order from local merchants on mobile devices.
Not so cool: While Microsoft has given Yammer flexible reign over product strategy and roadmap, Yammer does have to pay its dues. Yammer’s premium solutions are bundled with SharePoint and Office365 as a comprehensive cloud solution. SharePoint had countless customer feedback as a slower, more cumbersome, and outdated software relative to Box, which once joked about acquiring Yammer and now partners with Yammer competitor, Jive.
While Yammer integrated a plethora of 65 partners since the App Directory launched eight months ago, it would be cooler to see trendier consumer brands in its own directory. Currently, Yammer integrates with big brands like Evernote and Dropbox through Zapier, an app integration platform that most of Yammer’s competitors also use.
Lean: Yammer is a rare example of a “billion dollar startup” that, true to its word, is committing to an agile culture. It recently shifted to a startup-like model to decentralize ownership of new initiatives that employees hatch. Each quarter, people form different “lean startup” teams composed of product manager, product marketing, design, developer, and engineers. Each of the 7-8 team is charged to ship their initiative within a quarter. Yammer is as much an expert at engaging its clients’ employees as it is at its own. Employees are empowered at all levels to evangelize their initiatives to partners, users, and press. And unlike PayPal, Yammer still cares about press coverage from tech blogs and carries an “open-source” attitude.
Maybe not lean enough: Will Yammer really stick to its agile initiative? If so, will the outcomes be disruptive, or at least meaningful? One might be very skeptical since Yammer is part of Microsoft, a software giant that has not been lean or fast to market for over a decade.
Fast: Yammer and its targeted partners alike command free-mium pricing, which bolsters user base. Per Love, it currently hails 8.5M users worldwide at revenue of $6.43-12.86 per user which outpaces most consumer apps. Free-ninety-nine is not the only way to amplify user adoption faster than competition. Yammer has many other viral programs. For instance, when it went global in more than 130 countries, it crowd sourced most of its translation to get international users’ buy-in and, of course, more accurate business lingo for better user experience.
One thing is for sure, Yammer’s is growing “sexy fast” and is becoming leaner and cooler. Thanks to platform integration with other consumer-facing and enterprise software, Yammer can now access data across platforms and build a data goldmine. “As more and more software come out, App Directory will be more valuable to our software partners,” Love remarks, “connecting and building out the software ecosystem is definitely a long-term play.” Join us to find out more updates at Yammer’s Working Social Tour next month.